Anchor: The Lee Jae Myung administration has unveiled its first budget proposal. For fiscal year 2026, it is requesting a whopping 728 trillion won, or around 525 billion U.S. dollars, to respond to economic headwinds, including U.S. tariffs and a slowdown in exports.
Rosyn Park reports.

Reporter: The government’s budget plan for next year, which the Cabinet approved on Friday, seeks 728 trillion won in spending, an on-year increase of eight-point-one percent and the biggest jump in four years.

Finance Minister Koo Yun-cheol announced the plan, saying that state finances should prime the pump to facilitate economic recovery and growth while supporting a major transition to a leading economy.

The largest portion of 269 trillion won has been earmarked for areas of health, welfare and employment. Another 99-point-eight trillion won was allocated to education, and a record high of over five trillion won was added to the defense budget, bringing the total to 66-point-three trillion won.

The budget for research and development increased by the highest rate of 19-point-three percent to 35-point-three trillion won.

The government also focused a sizeable portion of its spending plan on supporting innovation-related sectors such as artificial intelligence(AI), which will get a direct injection of ten-point-one trillion won in funding, more than triple the amount this year, with the aim of making Korea one of the world’s top three AI powerhouses.

In line with the tariff deal reached between Seoul and Washington, one-point-nine trillion won of the budget has been allocated to support investment in the United States and strengthen bilateral cooperation, including projects to revitalize U.S. shipbuilding.

Despite an intensive restructuring of 27 trillion won in state expenditures, the budget increase will likely push the central government debt to over one-point-four quadrillion won and cause the GDP-to-debt ratio to jump to 51-point-six percent.

Once the government finalizes the budget proposal, it will be submitted to the National Assembly for review before it’s voted on by December 2.
Rosyn  Park, KBS World Radio News.